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DJ Black Sea Property PLC Half-year Report

TIDMBSP

RNS Number : 8676K

Black Sea Property PLC

27 September 2016

BLACK SEA PROPERTY PLC

("Black Sea Property" or the "Company")

HALF YEARLY REPORT

The Board of Black Sea Property PLC is pleased to announce the Company's unaudited half yearly report for the six months ended 30 June 2016.

Chairman's Statement

I am pleased to present the unaudited half yearly report of the Company for the six months ended 30 June 2016. The unaudited net asset value as at 30 June 2016 was EUR1,198,956 or 0.32 cents per share (GBP1,000,422 or 0.27 pence per share (30 June 2015: (GBP54,161) or (0.03) pence per share)).

On 18 January 2016, trading of the Company's shares on AIM was cancelled, despite the Company having raised GBP1.52 million and our investment adviser having identified potential investment opportunities. This put the Company in breach of its Jersey regulatory obligation to maintain a listing on a stock exchange recognised for such purposes. On 4 March 2016, shareholders voted to continue as a property investing company. On 11 May 2016, shareholders voted in favour of re-domiciling the Company from Jersey to the Isle of Man and thereupon the change of the Company's name to Black Sea Property PLC. On 20 June 2016, shareholders voted in favour of the adoption by the Company of a new memorandum and articles, compliant with the requirements of a closed-end company in the Isle of Man and as a result the Company now has an indefinite period of existence. On 20 July 2016, the Company became Isle of Man incorporated under its new name.

Elena Fournadjieva was appointed to the Board as an executive Director with effect from 22 July 2016. Elena is a Bulgarian national and has a Masters Degree in Russian Philology and a Masters Degree in Law, both from universities in Bulgaria. From 2006 - 2009, Ms Fournadjieva was the Head of Legal and the Administrative department of East Balkan Properties PLC (formerly Equest Balkan Properties PLC). East Balkan Properties PLC was previously an AIM listed property fund with investments in Bulgaria, Romania, Macedonia and Serbia. Since 2006, Ms Fournadjieva has provided investment fund management and administration services for Trans Balkan Investment LTD (formerly Equest Investment Balkans PLC). Elena complements the roles of the existing Directors and adds valuable additional Bulgarian experience and local knowledge.

On 22 August 2016, the Company published its admission document in compliance with the requirements of the ISDX Rules, and I was delighted that our shares commenced trading on the ISDX Growth Market on 31 August 2016. This represented a significant achievement in the new life of the Company and demonstrated strong support from our main shareholders and our team of advisers.

The Directors are now able to focus on the implementation of the Company's business strategy to create a diverse portfolio of opportunistic Bulgarian real estate assets, including development land, partially completed construction projects and completed buildings. We are working closely with AG Asset Management, our investment adviser.

On 3 February 2016, Timothy Scott Warren, a Jersey resident and chartered accountant, joined the Board as a non-executive Director and resigned following the re-domiciliation of the Company from Jersey to the Isle of Man. I am grateful to Tim for his warm contribution during this period.

The Board now recognises the need to raise further capital to ensure the Company can be a credible participant in the real estate market in Bulgaria, and hopes for the continued support of the Company's existing shareholders in that endeavour.

Meanwhile, the real estate market in Bulgaria continues to show signs of recovery with increases in the number of transactions at higher prices and a higher yielding rental market against the background of stronger macro-economic factors. Whilst the Company currently has relatively limited cash resources for a real estate investor, the Board believes that the Company will be able to complete appropriate acquisitions and deliver value to our shareholders. The Board continues to review and evaluate attractive opportunities that meet the Company's investment criteria.

Alex Borrelli

Chairman

Consolidated Statement of Comprehensive Income

for the period ended 30 June 2016

 
 
                                           (Unaudited)   (Unaudited)   (audited) 
                                              6 months      6 months        Year 
                                                    to            to          to 
                                               30 June       30 June      31 Dec 
                                                  2016          2015        2015 
                                   Notes           GBP           GBP         GBP 
 Total revenue 
 
 Gain on disposal of investment                      -             -           - 
  property 
 Loss on revaluation of                              -             -           - 
  investment property 
 
 Net gain on investment                              -             -           - 
  property 
                                          ------------  ------------  ---------- 
 
 Operating expenses 
 
 Other operating expenses            6       (205,715)     (232,931)   (389,479) 
 Foreign exchange gains                              -           417         565 
 
 Total operating expenses                    (205,715)     (232,514)   (388,914) 
                                          ------------  ------------  ---------- 
 
 Operating loss before 
  interest and tax                           (205,715)     (232,514)   (388,914) 
 Bank interest receivable                          495           800       1,988 
 Bank charges and interest 
  payable                            7         (1,625)       (1,461)     (3,026) 
 
 Loss before tax                             (206,845)     (233,175)   (389,952) 
 Tax expense                         4               -             -           - 
 Loss for the period after 
  tax                                        (206,845)     (233,175)   (389,952) 
 
   Other comprehensive loss 
 
 Items that may be reclassified 
  to profit or loss 
 Losses on translation 
  of foreign operations                              -       (8,911)     (8,206) 
 Total comprehensive loss 
  in period                                  (206,845)     (242,086)   (398,158) 
                                          ============  ============  ========== 
 
 Loss per share 
 Basic and Diluted loss 
  per share (pence)                             (0.06)        (0.11)      (0.14) 
 

Consolidated Statement of Financial Position

at 30 June 2016

 
                                          (Unaudited)    (Unaudited)      (Audited) 
                                              30 June        30 June         31 Dec 
                                                 2016           2015           2015 
                                 Notes            GBP            GBP            GBP 
 Current assets 
 
 Other receivables                              1,254         24,346         10,905 
 Cash and cash equivalents                  1,202,665         67,012      1,363,641 
 
                                            1,203,919         91,358      1,374,546 
                                        -------------  -------------  ------------- 
 
 Total assets                               1,203,919         91,358      1,374,546 
                                        =============  =============  ============= 
 
 Equity and liabilities 
 
 Issued share capital                      47,895,564     46,478,064     47,895,564 
 Retained deficit                        (45,580,922)   (45,217,300)   (45,374,077) 
 Foreign exchange reserve                 (1,314,220)    (1,314,925)    (1,314,220) 
 
 Total equity                               1,000,422       (54,161)      1,207,267 
                                        -------------  -------------  ------------- 
 
 Liabilities 
 
 Other payables                               100,241         44,473         65,273 
 Loan payable                      7          103,256        101,046        102,006 
 
                                              203,497        145,519        167,279 
                                                       -------------  ------------- 
 
 Total equity and liabilities               1,203,919         91,358      1,374,546 
                                        =============  =============  ============= 
 
 Number of ordinary shares 
  in issue                                365,112,896    213,112,896    365,112,896 
 NAV per ordinary share 
  (pence)                                        0.27         (0.03)           0.33 
 

Consolidated Statements of Changes in Equity

for the period ended 30 June 2016

 
                                  Share       Retained   Foreign exchange       Total 
                                capital        deficit            reserve 
                                    GBP            GBP                GBP         GBP 
 
 At 1 January 2016           47,895,564   (45,374,077)        (1,314,220)   1,207,267 
 
 Loss for the six-month 
  period                              -      (206,845)                  -   (206,845) 
 
 At 30 June 2016             47,895,564   (45,580,922)        (1,314,220)   1,000,422 
                            ===========  =============  =================  ========== 
 
 At 1 January 2015           46,478,064   (44,984,125)        (1,306,014)     187,925 
 
 Loss for the year                    -      (389,952)                  -   (389,952) 
 Other comprehensive 
  loss                                -              -            (8,206)     (8,206) 
 
 Transactions with owners 
 Issue of share capital       1,520,000              -                  -   1,520,000 
 Cost of share capital 
  issue                       (102,500)              -                  -   (102,500) 
 
 At 31 December 2015         47,895,564   (45,374,077)        (1,314,220)   1,207,267 

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DJ Black Sea Property PLC Half-year Report -2-

                            ===========  =============  =================  ========== 
 
 
 At 1 January 2015           46,478,064   (44,984,125)        (1,306,014)     187,925 
 
 Loss for the six-month 
  period                              -      (233,175)                  -   (233,175) 
 Other comprehensive 
  loss                                -              -            (8,911)     (8,911) 
 
 At 30 June 2015             46,478,064   (45,217,300)        (1,314,925)    (54,161) 
                            ===========  =============  =================  ========== 
 

Consolidated Statement of Cash Flows

for the period ended 30 June 2016

 
                               (Unaudited)   (Unaudited)   (Audited) 
                                  6 months      6 months        Year 
                                        to            to          to 
                                   30 June       30 June      31 Dec 
                                      2016          2015        2015 
                                       GBP           GBP         GBP 
 Operating activities 
 
 Loss before tax                 (206,845)     (233,175)   (389,952) 
 Foreign exchange gains                  -         (417)       (565) 
 Interest received                   (495)         (800)     (1,988) 
 Finance expense                     1,625         1,461       3,026 
 
 Movement in net cash 
  outflow from operating 
  activities                     (205,715)     (232,931)   (389,479) 
 
 
 Decrease/(increase) in 
  other receivables                  9,651       (4,063)       9,377 
 Increase/(decrease) in 
  other payables                    34,969       (8,309)      12,491 
 
                                 (161,096)     (245,303)   (367,611) 
 
 Withholding tax paid                    -             -           - 
 
 Net cash outflow from 
  operating activities           (161,096)     (245,303)   (367,611) 
 
 Investing activities 
 
 Proceeds on disposal                    -             -           - 
  of subsidiaries 
 Cash received on available              -             -           - 
  for sale assets 
 Cash received on held                   -             -           - 
  for sale assets 
 
 Net cash inflow from                    -             -           - 
  investing activities 
 
 Financing activities 
 
 Interest received                     495           800       1,988 
 Interest paid                       (375)         (415)     (1,020) 
 Loans received                          -       100,000     100,000 
 Issue of share capital                  -             -   1,520,000 
 Cost of share capital 
  issue                                  -             -   (102,500) 
 
 Net cash inflow from 
  financing activities                 120       100,385   1,518,468 
 
 Net decrease in cash 
  and cash equivalents           (160,976)     (144,918)   1,150,857 
 
 Cash and cash equivalents 
  at beginning of period         1,363,641       220,424     220,424 
 Effect of foreign exchange 
  rates                                  -       (8,494)     (7,640) 
 Cash and cash equivalents 
  at end of period               1,202,665        67,012   1,363,641 
                              ============  ============  ========== 
 

Notes to the Financial Statements

for the period ended 30 June 2016

   1.            General information 

Originally domiciled in Jersey, the Company was re-domiciled to the Isle of Man with effect from 20 July 2016 and continues under the Isle of Man Companies Act 2006 with the name Black Sea Property PLC and with registered number 013712V. The Company operates as a close ended investment company for the purposes of the Isle of Man Collective Investment Schemes Act 2008 and the Isle of Man Collective Investment Schemes (Definition) Order 2008.

The Company was originally incorporated on 27 January 2005 with limited liability in Jersey under the Companies (Jersey) Law 1991, as a closed-ended investment company with registered number 89392 under the name of The Black Sea Property Fund Limited. The Company adopted new articles of association as of re-domiciliation in the Isle of Man, and as a consequence the limitation of the Company's life to 31 December 2021, in accordance with the former Jersey articles of association, no longer applies.

The Company and its subsidiaries (together the "Group") seek to generate capital gains through the development, financing and sale of property in Bulgaria, including the prime areas of Bulgaria's Black Sea coast, the ski resorts and the capital, Sofia.

The Group has no employees.

   2.            Statement of compliance 

These interim consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year-ended 31 December 2015.

The consolidated financial statements of the Group as at and for the year ended 31 December 2015 are available upon request from the Company's registered office at IOMA House, Hope Street, Douglas, Isle of Man or at www.blackseapropertyplc.com.

These interim consolidated financial statements were approved by the Board of Directors on 26 September 2016.

   3.            Significant accounting policies 

The accounting policies applied in these interim financial statements, except for the ones listed below, are the same as those applied in the Group's consolidated financial statements as at and for the year ended 31 December 2015.

There are no other IFRS or IFRIC interpretations that are not yet effective that would be expected to have a material impact to the Company.

   4.            Taxation 

Isle of Man

There is no liability for income tax in the Isle of Man. Additionally, Isle of Man does not levy tax on capital gains.

Jersey

There is no taxation payable on the Company's or its Jersey subsidiaries' results as they are based in

Jersey where the Corporate Income Tax rate for Jersey resident companies is zero per cent. Additionally,

Jersey does not levy tax on capital gains.

Shareholders resident outside Jersey will not suffer any income tax in Jersey on any distributions made to them.

Bulgaria

Subsidiaries of the Company incorporated in Bulgaria are taxed in accordance with the applicable tax laws of Bulgaria. The Bulgarian corporate tax rate for 2016 is 10 per cent (2015: 10 per cent).

No deferred tax assets are recognised on trading losses in the subsidiary companies as there is significant uncertainty as to whether sufficient future profits will be available in order to utilise these losses.

   5.            Financial risk management policies 

The principal risks and uncertainties are consistent with those disclosed in preparation of the Group's annual financial statements for the year ended 31 December 2015.

   6.            Other administration fees and expenses 
 
                                 (Unaudited)    (Unaudited)     (Audited) 
                                 6 months to    6 months to       Year to 
                                30 June 2016   30 June 2015   31 Dec 2015 
 
 Directors' remuneration              48,125         25,574        63,360 
 Administration fees                  67,025         66,182       109,385 
 Legal and professional fees          42,887         48,638        39,385 
 Staff costs                               -         18,755        24,292 
 Auditors' fee                        18,150          6,809        27,797 
 Nominated advisor fees                3,050         16,983        25,850 
 Investment advisory fees             15,000              -        12,722 
 Registrar fees                        5,846          7,947        19,194 
 Broker fees                           5,632         22,418        43,904 
 Regulatory fees                           -         19,625         7,600 
 
                                     205,715        232,931       373,489 
                               -------------  -------------  ------------ 
 
   7.            Loans payable 

In 2015, the Company was provided with an unsecured loan facility of GBP350,000 from Mamferay Holdings Limited. On 5 February 2015, the Group received GBP 100,000 in relation to the facility.

Interest on borrowed amounts is calculated on the 3 months' Euro Interbank Offered Rate plus 2.5% per annum. Total interest charged during the six months' period to 30 June 2016 was GBP 1,250.

The loan and associated interest is repayable in full on 29 January 2017. Additionally, the lender has the option of converting the loan and accrued interest into equity of the Company.

   8.            Loss per share 

The basic loss per ordinary share is calculated by dividing the net loss attributable to the ordinary shareholders of the Company by the weighted average number of ordinary shares in issue during the period.

 
 
                                 (Unaudited)   (Unaudited)     (Audited) 
                                    6 months      6 months          Year 
                                          to            to            to 
                                     30 June       30 June        31 Dec 
                                        2016          2015          2015 
 
 Loss attributable to owners 
  of parent                        (206,845)     (233,175)     (389,952) 
 Weighted average number of 
  ordinary shares in issue       213,112,896   213,112,896   213,112,896 
 
 Basic loss per share (pence)         (0.10)        (0.11)        (0.18) 
                                ------------  ------------  ------------ 
 

(MORE TO FOLLOW) Dow Jones Newswires

September 27, 2016 02:00 ET (06:00 GMT)

DJ Black Sea Property PLC Half-year Report -3-

The Company has no potential dilutive ordinary shares; the diluted loss per share is the same as the basic loss per share.

   9.            Net asset value per share 
 
                                (Unaudited)   (Unaudited)     (Audited) 
                                    30 June       30 June        31 Dec 
                                       2016          2015          2015 
 
 Net assets attributable to 
  owners of the parent (GBP)      1,000,422      (54,161)     1,207,267 
 Number of ordinary shares 
  outstanding                   213,112,896   213,112,896   213,112,896 
 
 Net Asset Value                       0.47        (0.03)          0.57 
                               ------------  ------------  ------------ 
 
   10.          Events after reporting date 

As detailed in the Chairman's report, the Company became Isle of Man incorporated under its new name on 20 July 2016 and commenced trading on the ISDX Growth Market on 31 August 2016.

Elena Fournadjieva was appointed an executive Director with effect from 22 July 2016. Timothy Scott Warren, a Jersey resident, who had served as a non-executive Director from 3 February 2016, resigned from the Board following the re-domiciliation of the Company from Jersey to the Isle of Man.

There were no other significant events after reporting date.

For further information, please visit www.blackseapropertyplc.com or contact the following:

 
 BLACK SEA PROPERTY PLC 
  Alex Borrelli, Chairman         07747 020600 
 PETERHOUSE CORPORATE FINANCE 
  LIMITED 
  Corporate Adviser 
  Heena Karani, Fungai Ndoro     020 7469 0933 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR LLFVRAEIRFIR

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